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Magic 5 - five pips only

  • #41
  • Nov 30, 2014 5:21am Nov 30, 2014 5:21am
This strategy really caught my attention!
Actually on my visual backtest, I made now over the weekend, says that the winning rate is quiet high!
The piont is now to find a reasonable Stop Loss rule...
When I check some pairs we need around 15 pips space to get the trade into TP... If this Stop Loss get hit we need 4 straight winners to get back to breakeven ( -15 pips + comissions plus we pay comission on every winning trade)

I will open up a freshly demo account to see how it works with a fixed SL...
  • #42
  • Nov 30, 2014 6:30am Nov 30, 2014 6:30am
Quoting littlecraig
Hi Tk here is my graph, all these would of made the 5 pips, but it is easier to see when the market as passed, would these trade been perfect setups? {image}
yes sure craig. they are good sell setups for obvious reasons explained earlier.

by the way, there's good buy setup where price is currently is (rsi and temporary or short term oversold situation)
always draw trendlines
  • #43
  • Nov 30, 2014 6:49am Nov 30, 2014 6:49am
Quoting Mr.Ma
This strategy really caught my attention! Actually on my visual backtest, I made now over the weekend, says that the winning rate is quiet high! The piont is now to find a reasonable Stop Loss rule... When I check some pairs we need around 15 pips space to get the trade into TP... If this Stop Loss get hit we need 4 straight winners to get back to breakeven ( -15 pips + comissions plus we pay comission on every winning trade) I will open up a freshly demo account to see how it works with a fixed SL...
The strategy caught my attention too and I think that your point it's really important!

I've been doing some backtesting too and I like the strategy but, as yoy say, the problem may be the drawdowns.

I think we should try to "discover" the best SL rules and the system will improve a lot! I'll be posting if I "find" something interesting
  • #44
  • Nov 30, 2014 7:33am Nov 30, 2014 7:33am
hey nation, I commented about stop-loss thing in earlier posts. I repeat again.
I manage Sl manually since m15 is volatile timeframe.
However, you can apply SL over/below last HA candle of opposite color as shown below:

http://img.ie/images/w1iww.jpg


In general, range of SL is up to your account equity and position size.
always draw trendlines
  • #45
  • Nov 30, 2014 9:30am Nov 30, 2014 9:30am
Quoting tk5
hey nation, I commented about stop-loss thing in earlier posts. I repeat again. I manage Sl manually since m15 is volatile timeframe. However, you can apply SL over/below last HA candle of opposite color as shown below: {image} In general, range of SL is up to your account equity and position size.
Thanks for that it is clear however it seems that the problem might remain it reallyu looks like the candles are bigger then 5 pips making the stoplos placement to a negativa rr risking more to then 5 pips to get 5 pips. Dont try to be negative just try to learn this

Best regards
  • #46
  • Nov 30, 2014 9:39am Nov 30, 2014 9:39am
Hi, a suggestion, you don't wait for price action to hit your s/l ...terminate your trade when it starts mowing against you..?
  • #47
  • Nov 30, 2014 10:13am Nov 30, 2014 10:13am
Quoting jgadefelth
{quote} Thanks for that it is clear however it seems that the problem might remain it reallyu looks like the candles are bigger then 5 pips making the stoplos placement to a negativa rr risking more to then 5 pips to get 5 pips. Dont try to be negative just try to learn this Best regards
just foret about traditional SL RR thing in this case.
SL is in this case to avoid 'armegeddon'
always draw trendlines
  • #48
  • Nov 30, 2014 10:35am Nov 30, 2014 10:35am
Quoting tk5
{quote} just foret about traditional SL RR thing in this case. SL is in this case to avoid 'armegeddon'

You scare me when you talk like that, for me it sounds like it is not for a newbie and that the sl is just a last way out often you are out long before if the trade moves againsat you, but it all comes down to experience and be able to read the trade yes ?

Best regards
  • #49
  • Nov 30, 2014 10:42am Nov 30, 2014 10:42am
Quoting jgadefelth
{quote} You scare me when you talk like that, for me it sounds like it is not for a newbie and that the sl is just a last way out often you are out long before if the trade moves againsat you, but it all comes down to experience and be able to read the trade yes ? Best regards
yes.
it's discretionary. SL is sth personal, its up to size of your balance and position opened.
dont forget this is short term trading. if you enter with proper setup, very rarely it will go against you.
always draw trendlines
  • #50
  • Nov 30, 2014 11:02am Nov 30, 2014 11:02am
Quoting tk5
{quote} yes. it's discretionary. SL is sth personal, its up to size of your balance and position opened. dont forget this is short term trading. if you enter with proper setup, very rarely it will go against you.

Maybe you can teach this also ?


Best regards
  • #51
  • Nov 30, 2014 11:11am Nov 30, 2014 11:11am
Quoting jgadefelth
{quote} Maybe you can teach this also ? Best regards
teach what))) I shared comments, rules and everything. its there.
always draw trendlines
  • #52
  • Nov 30, 2014 11:50am Nov 30, 2014 11:50am
Quoting tk5
hey nation, I commented about stop-loss thing in earlier posts. I repeat again. I manage Sl manually since m15 is volatile timeframe. However, you can apply SL over/below last HA candle of opposite color as shown below: {image} In general, range of SL is up to your account equity and position size.
Thank you for answer (again) haha. Yeah, I suppose that's right and the manually management seems to me to be the necessary "rule".

Now I want to think about how to manually manage the SL. Some ideas could be:

Every (2/3/5/...) pips up --> Move the SL (2/3/5/...) pips up and never move it down again.

When you're (2/3/5/...) pips in profit --> Move SL to 0 and remain it there.

And... many more ideas! That's what I'm thinking about now

Any SL manually management strategy that seems usefull for you guys?
  • #53
  • Nov 30, 2014 12:10pm Nov 30, 2014 12:10pm
I think a good way to handle is to have an eye on the RSI!

Also a good way is to close the trade when there is an opposite signal!
Using the last swing low etc is a worst case SL and will take too long to recover.

Will test it next week and then we will see
  • #54
  • Nov 30, 2014 12:14pm Nov 30, 2014 12:14pm
Quoting Mr.Ma
I think a good way to handle is to have an eye on the RSI! Also a good way is to close the trade when there is an opposite signal! Using the last swing low etc is a worst case SL and will take too long to recover. Will test it next week and then we will see
Good points!

Please, tell us your experience during the week
  • #55
  • Nov 30, 2014 12:38pm Nov 30, 2014 12:38pm
Quoting alberduris
{quote} Thank you for answer (again) haha. Yeah, I suppose that's right and the manually management seems to me to be the necessary "rule". Now I want to think about how to manually manage the SL. Some ideas could be: Every (2/3/5/...) pips up --> Move the SL (2/3/5/...) pips up and never move it down again. When you're (2/3/5/...) pips in profit --> Move SL to 0 and remain it there. And... many more ideas! That's what I'm thinking about now Any SL manually management strategy that seems usefull for you guys?
listen, why you struggle...first learn entering correctly in forex. that's more important.

stop-loss is discretionary: at the discretion of the user.


because in such method price may temporary and shortly move back and forth before reaching your target - placing close stop-loss is suicidal.

hopefully, SL discussion will end here, finally.
I
always draw trendlines
  • #56
  • Nov 30, 2014 1:00pm Nov 30, 2014 1:00pm
Quoting tk5
hey nation, I commented about stop-loss thing in earlier posts. I repeat again. I manage Sl manually since m15 is volatile timeframe. However, you can apply SL over/below last HA candle of opposite color as shown below: {image} In general, range of SL is up to your account equity and position size.
Hellou, what is the different to EMA 200 ,that ,not to take position, rergards juha
  • #57
  • Nov 30, 2014 1:41pm Nov 30, 2014 1:41pm
Quoting tk5
{quote} listen, why you struggle...first learn entering correctly in forex. that's more important. stop-loss is discretionary: at the discretion of the user. because in such method price may temporary and shortly move back and forth before reaching your target - placing close stop-loss is suicidal. hopefully, SL discussion will end here, finally. I
I really appreaciate your words and you're right again. The point is to master the entering so I will work on that more than any other thing.

And yeah, at least for my part, SL discussion will end here, finally.
  • #58
  • Nov 30, 2014 2:56pm Nov 30, 2014 2:56pm
I agree. with 5 pips, provided you are not looking to get rich quick, you can make a decent income.
  • #59
  • Nov 30, 2014 2:56pm Nov 30, 2014 2:56pm
Can anybody please recommend a very low spread broker suitable 4 trading this system?The broker in question must not have a policy against scalping and must not have payment/withdrawal problem
  • #60
  • Nov 30, 2014 3:07pm Nov 30, 2014 3:07pm
I use a 25pip fixed emergency default stop with my 15m setups,, my thought here is we are trading at high leverage and small TP and one needs at the very least an emergency hard stop in case of a platform, hardware, power fail, in fact just last week while a position was on the power/inet went out for 5 minutes, the account was safe, I knew what the loss would be if things went bad while I had no access and couldn't get back on and I rarely hit this stop. The soft stop is up to the trader, my hit rate with this is pretty good with positive runs of 30+ trades at times without loss so R:R isn't as much of a concern to me, I just have find more opportunities (trade longer for the day) to make up a loss when one occurs. There are so many variations I trade of this basic method and each has its own type of stop it would be hard to detail them, just use common sense and besides experience is the best teacher, the longer you work with the method, the better your entries become, the more entries you see, the fewer mistakes you make and the longer your win streaks become, just dont let things run away on you for the sake of one trade, take a 20 or 25 pip hit and recover to trade again,,, the next opportunity will be 15m away.
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